63B8B388EB29D23A8725896B0074B286 Hearing Summary

PUBLIC
BILL SUMMARY For PRESENTATION FROM THE PUBLIC UTILITIES COMMISSION

OTHER COMMITTEE COMMITTEE ON JOINT SELECT COMMITTEE ON RISING UTILITY RATES
Date Mar 7, 2023
Location Old State Library

Presentation from the Public Utilities Commission - Committee Discussion Only

Attachment Tag

File Name

Attachment A

Attachment A.pdf

02:14:42 PM

Erin O'Neill, Chief
Economist for the Public Utilities Commission (PUC), introduced herself
and began her presentation (Attachment A). Ms. O'Neill gave an overview
of the PUC's mission, why the PUC exists, how the PUC approves rate changes
by utilities. Ms. O'Neill next gave an overview of the winter 2022-2023
rates and their impact on ratepayers. Ms. O'Neill gave a more in-depth
description of the experience of the typical Xcel Energy customer this
winter. Ms. O'Neill went over the four primary factors driving high
utility bills as well as outlining factors that are not driving high utility
bills this year.

02:30:44 PM

Ms. O'Neill went
over the first main driver of increases: the commodity price of natural
gas. She discussed the history of gas cost adjustment. She
discussed wholesale gas prices and the fuel charge. Ms. O'Neill then
went over the second main driver: the especially cold winter season during
winter 2022-2023. She then went over the third driver: deferred costs
from Winter Storm Uri. Finally, the fourth driver: the base rate increase,
which were driven by the utility "cost of service." She went
into detail about the Xcel gas rate case.

02:38:14 PM

Ms. O'Neill responded to questions about the base rate changes and the difference between Xcel's requested base rate increase and what was approved by the PUC. Ms. O'Neill responded to additional questions about the infrastructure costs. Ms. O'Neill responded to additional questions about rate setting and infrastructure for gas storage. Gene Camp, Deputy Director of the PUC, answered additional questions about gas storage facility requirements.

02:54:56 PM

Ms. O'Neill gave an overview of the slides that she was not able to go over in detail. She discussed the Xcel gas rate increases over the years in perspective with the proportion of total gas rates broken out into base rates, cost recovery costs, and fluctuating gas prices. Ms. O'Neill answered questions about over or under charging on the part of utilities based on the actual price of natural gas and explained the refund or extra charge process based on actual rates. Ms. O'Neill explained the concept of budget billing to the committee.

03:05:52 PM

Ms. O'Neill answered
additional questions about blunting the impact of rate changes and the
incentive of utilities to control rates. Ms. O'Neill closed by showing
a chart comparing the average gas rates across Colorado in comparison to
the country as a whole. On average Colorado's rates are lower than the
national average. Lastly, she gave an overview of the PUC's activities
to try to address affordability concerns for Colorado consumers this winter.

03:12:40 PM

Ms. O'Neill responded
to questions about what the PUC decides is a "just and reasonable"
increase or rate. Ms. O'Neill answered a question about denying rate
increase requests based on the "just and reasonable" requirement.
Ms. O'Neill and Mr. Camp responded to a question about penalties
for outages. Ms. O'Neill answered a question about rulemaking and
possible costs associated with those in comparison to litigated rate cases.

Presentation from the Public Utilities Commission - Committee Discussion Only

Colorado General Assembly